The Right Solutions

Are drivers for hire independent contractors or employees?

For years, professional drivers have faced a legal conundrum in classification. In court, it can really matter whether one is an independent contractor or an employee. The standards used for figuring out if someone is a contractor or not frequently presents a serious sticking point in lawsuits.

The uncertainly built to a boiling point when FedEx drivers began filing class action lawsuits, insisting that they should be deemed employees. Their cases cited various laws from various states, amounting to a massive cluster of citations, laws and claims. Eventually, the lawsuits were rolled into multi-district litigation in Indiana. That decision resulted in a ruling that FedEx drivers were employees in three states and independent contractors in 23. Appeals followed.

Employee and contractor statuses are completely different according to federal tax law, federal wage and hour law, benefits law and anti-discrimination law. Throw in other existing variables from state to state and you get a recipe for confusion. Often, the same employment “arrangement” can be classed in a variety of ways in different states under different laws.

The legal question that has been haunting FedEx drivers for more than ten years has, in part, been solved. The drivers’ lawsuits contended that they were misclassified. At appeal in August 2014, the Ninth Circuit Court of Appeals ruled that in Oregon and California, at least, drivers are employees and not contractors.

The Ninth Circuit issued two opinions reversing the initial decision for California and Oregon drivers. The Ninth Circuit pointed out that the agreements between the drivers and the company gave the employer the right to control their manner of dress, workloads, how they arranged their cargo, their physical appearance and in what areas they worked. Ultimately, the court stated that given the amount of control FedEx exerted over drivers, that they were to be considered employees under Oregon and California law.
It’s good to see the Ninth Circuit interpreting the law in favor of workers. However, challenges like this are still likely to continue until the laws relating to worker classification are further clarified.